Lawyers are taking an increasingly relaxed approach to filing costs budgets on the mistaken assumption they might escape sanctions, a costs expert said today.
Professor Dominic Regan told the Association of Costs Lawyers conference in London that a ‘ghastly myth’ had developed in recent months about the likelihood of leniency.
Regan, a respected commentator on legal costs, said lawyers are wrongly leaning on the Chartwell judgment from 2014, where the Court of Appeal made an exception to the general rule that efficiency and proportionality will be a paramount consideration. Regan acknowledged that Civil Procedure Rule 3.14, on sanctions for failure to file a budget, includes the caveat ‘unless the court orders otherwise’ - but this should not result in lawyers adopting a more relaxed approach.
‘There is this view getting currency that you can get relief under rule 3.14 and the ‘unless the court otherwise orders’ element,’ he said. ‘The suggestion is that you can get relief without satisfying the stringent requirements of the Denton test. That is wrong. First of all, this a particularly brutal sanction and default is a serious matter. The idea there is a lighter, more forgiving and generous approach out there doesn’t stand up.’
Regan stressed that the most important thing to remember is that a late budget results in sanctions – the court treating parties as having filed a budget comprising only the applicable court fees. The sanction stays in place unless and until relief is obtained from the court, but the application must always be supported by evidence.
Regan added that the days of offering to pay the other side’s wasted costs were over, and lawyers ‘buying your way of trouble’ is no longer acceptable.
Parties have also been known to file budgets with sections blank, or advising that figures will be added at a later date. ‘Judges read that as a big fat zero,’ added Regan.